8 Mar 2017
oil-barrel

Crude Oil

Crude oil Futures were largely fighting to stay above the previous settle for most of the US trading day yesterday. Though they eventually buckled under, the future of crude prices is still hanging in the balance.  Brent lost 9 cents to settle at $ 55.92 / bbl. WTI lost 6 cents to settle at $ 53.14 /bbl.
Saudi Energy minister Khalid al-Falih said yesterday that the cuts had helped reduce the imbalance, albeit a lot slower than he expected.  He also said that OPEC would not let other producers (read the US) to benefit from the price hike that the OPEC has brought about.

At the same time, API reported a huge build of 11.4 million barrels in crude stocks in its weekly report yesterday, a statistic which will dampen market sentiment today.  While it is offset to some extent by unarguably bullish draws of 5.0 million barrels in gasoline and 2.9 million barrels in distillates, the crude build underscores the fact that there does not appear to be any shortage of crude oil.  And the market is yet to see the impact of the freshly added oil rigs in the past several months.  This can be expected to start supplying the market significantly from the next month onwards.

Markets will look to the official report from the EIA today for confirmation.  Analysts expectation are

Crude        : + 1.9 MB
Gasoline   : – 1.4 MB
Distillates : – 0.9 MB

Naphtha

Naphtha prices have slipped into contango yesterday for the first time since December on heavier supplies being anticipated.  The March MOPJ crack is valued at  $ 0.20 / bbl.  The Singapore crack for March is valued at  – $ 1.30 /bbl.

Gasoline 

Gasoline continued to improve.   The March crack is valued at $ 10.5 -$ 11.00 /bbl. April is valued at $ 10.4 / bbl.  We expect to see the crack improve over the next few days as the impact of the gasoline draws manifests itself through global stocks. The markets will hope for a good driving season in the US.

Middle Distillates

Gasoil prices too improved.  The March crack is now at $12.2 / bbl. which could be largely due to crude price movement.  The regrade continues to languish around -$ 1.00 /bbl.

180 CST Fuel Oil

Fuel oil cracks continue to stay at just below -$ 4.0 /bbl. The March crack is valued   -$ 4.05/bbl and April around -$ 3.95/bbl.  The spate of buying in the window continues, but it does not seem to do much in terms of improving market sentiment.

About this blog

 This blog post attempts to give a top level summary of the Singapore market goings on to a person who seeks to obtain a directional sense of the market on a daily basis.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

 

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